Transcript: Treasury Secretary Timothy Geithner

Aug 2, 2009

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GEITHNER: That's something we're very focused on, again. We need recovery to be built on private demand, private spending. Businesses taking a chance again on the American economy. Putting investments to work. Starting to rebuild their employment base. That's the ultimate test for recovery. And a very important thing for us is to make sure we're sticking with this until we're very confident we have a strong private sector led recovery in place.

STEPHANOPOULOS: And what are you looking at that would give you some cause for concern that we could slip back.

GEITHNER: Well, I don't think you can see that risk now, again. In the stimulus program and what we've done in the financial sector are designed to have sustained impact. Again, the damage we had done to our economy was so great that it was just going to take a long sustained effort.

STEPHANOPOULOS: And that means unemployment will remain high for the rest of this year. At the same time we're seeing reports that up to 1 and a half million people could be losing their unemployment benefits by the end of this year. Does that mean that the Administration is going to have to look at extending unemployment benefits again?

GEITHNER: I think that is something that the Administration and Congress are going to look very carefully at as we get closer to the end of this year. And that's going to be one important thing to look at

STEPHANOPOULOS: We already know that a million and half people are going to lose their benefits don't we?

GEITHNER: Again the most important thing we need people to understand is working with the Congress we're going to make sure we do enough to bring this economy back. But you know our job is not just to repair the damage done to this economy, bring growth back. We need to make sure that we are making the kind of investments that will build a more productive economy, gains of growth more broadly shared. And that's why it's so important as we focus on recovery that we're making investments in health care reform, in education, in infrastructure, fixing our financial system. The kind of things we're working on right now.

STEPHANOPOULOS: I do want to want to get to that and as we pull out of the recession the other big worry going forward is deficits. You heard that from the Chinese this week. You hear that this week and our next guest Alan Greenspan has warned of this as well, and Senator Charles Grassley, the Republican ranking member of the Finance Committee cited CBO estimates, Congressional Budget Office estimates, that your budget will add 9 trillion dollars to the national debt over the next decade.

SEN. CHUCK GRASSLEY: Our debt as a percentage of the economy will grow in excess of 80% a level that also has not been seen since this country was in World War II.

STEPHANOPOULOS: That is a very high level and I know you believe that passing health care is central for getting the deficit under control but independent analysts say even with that you are going to need to find new government revenues. The former deputy Treasury Secretary Roger Altman said it is no longer a matter of whether tax revenues should increase but how. Is he right?